Hopes fade among Queensland property owners left in limbo by Mayfair 101
Earlier this year, Margie and Chris Lower cleaned out their tiny corner of tropical paradise in Mission Beach, preparing to hand the keys of their fisherman’s shack to investment firm Mayfair 101.
Margie, who has stage four bowel cancer, had wanted to be closer to hospitals for medical treatment and family. She imminently needs about $60,000 from the sale of their home to pay for a course of immunotherapy.
The couple were the sort of seller that Mayfair 101 encountered right across Mission Beach, where property prices had been stagnant for more than a decade. It went on an investment spree last year, snapping up the right to buy more than 230 local homes, businesses and vacant blocks to complement its $31m purchase of the nearby Dunk Island resort.
In March, the evening before the Lowers’ beachfront home was due to settle, they were told Mayfair 101 was exercising an unusual “force majeure” clause to indefinitely suspend about 60 outstanding contracts to buy properties in Mission Beach.
With those sales still in limbo, last week a key company in the Mayfair group was placed in the hands of receivers. This followed an investigation and legal action by the corporate regulator that has hampered Mayfair’s attempts to attract new investors required to resume property purchases.
Court documents show the receivers are to investigate whether Mayfair 101’s founder, James Mawhinney, may have breached companies law in the operation of the group.
There is no allegation Mawhinney has done anything wrong.
The Lowers remain in the house, two months after the settlement date in their contract, without most of their possessions or winter clothes. They say they are unsure if or when the sale will ever be concluded.
“I didn’t want to be in the situation of being ill in a house … so far from treatment,” Margie told Guardian Australia. “We didn’t want to be so far from medical facilities. Cancer is totally unpredictable, and should something happen to me I didn’t want Chris to be here on his own so far away from family.
“I’m on the last round of a threemonth treatment that will then be reviewed, but the oncologist has said after this we look at immunotherapy. It’s not on the [pharmaceutical benefits scheme], it costs you $6,000 a time, they do it in 10-weekly lots.
“We’ve got the basics to be able to be here, but all our family photos and things like that, my nice plates and cups and saucers, my sewing machine, tools, books, hats, socks and scarves – they all got sent to storage on the Sunshine Coast. We had two garage sales and sold the ladder and the lawnmower.”
The day before the scheduled settlement, Margie and Chris went into Mayfair’s Mission Beach office and asked if they could rent the house back for another few weeks after the sale went through.
“Mayfair rang and said that it would be fine to rent back, just let the settlement go through and then go down and
see [the real estate agent] and give him $300 a week rent. It was a generous rental arrangement.
“Around 4pm that day, we got a call from our conveyancer who said they had got this letter and Mayfair was not going to proceed with settlement, because of the pandemic.”
During the past few months, their real estate agent has sent two “compassionate” pleas to Mayfair to prioritise the settlement. Both went direct to Mahwinney. A response on 6 May said the situation was “at the forefront of our minds” and that Mahwinney was aware of the situation.
They’ve heard nothing since. Guardian Australia has spoken with several other residents whose property sales have been delayed. Most say they have been told little to nothing in the past two months.
Meanwhile, Mayfair 101 has been busy in court fighting the corporate regulator over allegations, which it denies, that advertising of some of its investment products was misleading and deceptive because it compared them to bank term deposits.
It is also fighting the trustee of one of its feeder funds, IPO Wealth, which last week put more than a dozen Mayfair 101 companies into receivership after the group failed to repay $3m due earlier in the month.
The fund, which has about 180 investors, has loaned more than $86m to the Mayfair 101 group.
In an affidavit filed with the court, Craig Dunstan, the managing director of trustee company Vasco Trustees, said he had also become concerned when, in April, Mawhinney sent him an email saying the value of two investments, UK business management software group Accloud and Indian payments company Paymate, had plunged by $17.7m.
Dunstan said Mawhinney did not return calls and emails from his office a fortnight ago, apart from an email last Wednesday in which Mawhinney said Mayfair 101 was restructuring its business.
In a statement posted to Mayfair 101’s website, the group complained that Dunstan did not respond to this email and described the appointment of receivers as “a premature and imprudent measure”.
“Despite contrary media reports, no attempts were made by Vasco to contact the Group in the week leading up to the appointment of receivers,” the company said.
It said it had been “impacted by Covid-19 and is working diligently and tirelessly through the unprecedented challenges these circumstances have presented” and said legal action by the Australian Securities and Investments Commission “exacerbated the already challenging circumstances”.
For Margie and Chris, the situation is concerning. The unusual clause in their property contract – which is more typically used in contracts for major projects – notionally allows Mayfair to delay the process indefinitely.
“The clause says because of the unforeseen event they were suspending the settlement and ‘time is no longer of the essence’. To us, time is of the essence.
“When I had my diagnosis, Chris and I decided was there really wasn’t much we could control, but we could control our situation. So we put the property up for sale.
“It’s like that control has been taken away from us. The sale freed up money that we could use if I require immunotherapy, but they’ve denied us that opportunity.”
Mission Beach, which was hit by cyclones Larry and Yasi, has become desperate for some investment, local business owners say. Many were eager to support Mayfair’s plans on that basis. Now the fear is that if that vision does not come off, property could be further devalued or difficult to sell again.
Many of those whose property sales settled have already left the area. The town’s only local medical practice also closed earlier this year.
“Local people have seen big shots come and go before, but it has been quite a divided community, there’s no two ways about that,” Margie said.
“We don’t know what will happen now, because if things are delayed indefinitely it will devalue homes here again. There are some people who think that we shouldn’t make too much noise, that it might scare investors needed to keep Mayfair afloat.
“I think people making investments deserve transparency when the rest of their life depends on their income.”